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Ed Driscoll

California: The Ninth Circle of Business Hell

August 10th, 2012 - 1:08 pm
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One of the reasons why Bill Whittle’s new video on California going out of business hits home is that it’s a reminder that, to borrow from the title of Fred Siegel’s book on America’s cities (including Los Angeles), the future once happened here.

In the 1960s and ‘70s, NASA and the Air Force were testing the most advanced aircraft ever built – the X-15, the XB-70, the wingless lifting body series, and ultimately, the Space Shuttle, the first spacecraft that would land on a runway and be (sorta-kinda) reusable at Edwards Air Force Base. Hollywood in the 1960s was showing us the wonders of the far-future with Star Trek. In the 1970s, some scruffy-looking guys in plaid shirts and blue jeans figured out how to mass-market the personal computer; even scruffier looking guys in plaid shirts and jeans figured out how to tie a film camera into a computer and revolutionized Hollywood’s special effects.

Even to everyday people not in Hollywood or high tech, California itself appeared clean, expansive and forward-thinking, as Jennifer Rubin noted in one of her last pieces for Commentary a few years ago on what it was like to move to California in the 1960s.

Flash-forward to today. As Peggy Noonan writes (on a topic that’s a perennial Cri de coeur from conservative pundits):

When Americans go to Europe they see everything but the taxes. The taxes are terrible. But that’s Europe’s business and they’ll have to figure it out. Yes what happens there has implications for us but still, they’re there and we’re here.

What Americans are worried about, take as a warning sign, and are heavily invested in is California—that mythic place where Sutter struck gold, where the movies were invented, where the geniuses of the Internet age planted their flag, built their campuses, changed our world.

We care about California. We read every day of the bankruptcies, the reduced city services, the businesses fleeing. California is going down. How amazing is it that this is happening in the middle of a presidential campaign and our candidates aren’t even talking about it?

Well, Romney has talked about Solyndra, even visiting their plant to illustrate the dangers of Obama’s crony venture socialism. But like Detroit, California is the logical end-point of Obama-nomics. Why would Obama complain? Besides, having blown-up the American auto industry, the energy industry, and heck even Gibson Guitars, presumably Obama thinks that Sacramento are a bunch of pikers when it comes to threatening businesses. Or as Troy Senik of Ricochet adds in a post titled “California, the Cautionary Tale:”

Every year, CEO magazine – a publication targeted at the nation’s captains of industry – ranks the 50 states based on how friendly their respective economic climates are for business. In 2012 – for the eighth straight year – California finished dead last.

As JP Donlon put it in the piece accompanying the magazine’s rankings, “Once the most attractive business environment, the Golden State appears to slip deeper into the ninth circle of business hell. The economy, which used to outperform the rest of the country, now substantially underperforms. And its status as the most ruinously contentious place to operate remains undisturbed.”

Harsh words, but hardly a new diagnosis from America’s business community. In 2010, the magazine called the Golden State “the Venezuela of North America” for its overt hostility to any commerce that doesn’t originate via legislative fiat. If this were the diagnosis of a single, industry-specific publication, perhaps CEO’s condemnations could be taken with a grain of salt. But the numbers bear out the magazine’s claim at every turn.

Pick a metric for public sector performance across the 50 states and it’s likely you’ll find California at or near the bottom. The Tax Foundation ranks the state 48th in the nation for its overall business tax climate, and 50th for individual income taxes. The state has the highest number of public employees (nearly 2.5 million according to a 2011 report by MarketWatch) in the country.

The future used to happen in California. Having transformed itself into Europe on the Pacific, like its Continental inspiration, the formerly Golden State appears to have no future. And having once set its sites on outer space, California is now lucky if it can simply keep the power on.

Romney’s not going to win California, but as Noonan writes, he can and should use it constantly in his speeches as an example of an increasingly leftwing and sclerotic government in total control of a state and remind voters that when they see the once-Golden State now tarnished and rusted, they’re seeing the endgame of Obama’s vision. (With Detroit representing the endzone, as an earlier video from PJTV starkly illustrated.)

(Cross-posted at the Tatler.)

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